The net income reported on the income statement for the current year was $720,000. Depreciation recorded on store equipment for the year amounted to $32,700. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method.
b. Briefly explain why cash flows from operating activities is different than netincome.

End of Yea $78,450 56,250 76,800 9,000 73,500 40,200 Beginning of Year Cash Accounts receivable (net) Merchandise inventory Prepaid expenses Accounts payable (merchandise creditors) Wages payable $72,300 53,400 81,330 6,900 68,400 44,700